How can we speed up the energisation of Africa? A new IDEA is needed!

Africa urgently needs to address the widespread lack of energy access and meet the SDG7 goals. Due to population growth, Sub-Saharan Africa (SSA) will soon account for 90% of the 674 million people worldwide without access to energy, 80% of which live in rural areas.

The typical top-down approach based on international public funding will not meet the long term needs of these communities. SNV believes that Integrated Decentralised Energisation in Africa (IDEA) is an effective way to dramatically increase energy access, reaching communities who need it the most. We are now looking for partners to help develop, fund and implement this new IDEA.

IDEA: a bottom-up approach to meet local customer needs

There have been many initiatives in SSA to facilitate energy access for rural communities - from household stand-alone systems to multi-village mini grids. But these have generally taken a siloed approach that considers only one type of energy delivery. This fails to recognise that a mix of energisation options is most cost effective, using appropriate and innovative business models to make this option affordable.

Energy for agricultural production

For many rural African communities, access to household electricity simply isn’t enough - the use of energy for agricultural production is crucial.  Supporting farmers and SMEs to grow their businesses raises income levels and enables investment - increasing the electricity demand and therefore making the connection more cost-effective.

An example of this integrated approach in action is the Mashaba mini-grid in Zimbabwe - a project supported by SNV.  Here, the mini-grid provides household energy, and energy for local businesses, the local school and a health clinic. It pumps water to irrigate local farmers’ fields so that yields are increased by 50%. More profit means greater demand and reliable payment for the operation of the mini grid.

Getting the private sector on board

To engage private investors, an attractive financial model is needed. The private sector is often deterred by the uncertainty of local conditions. This risk can be mitigated by using public funds to offset the initial capital requirement – justified on the basis that energy supply is a basic public service. In turn, this support will attract private investment for the operational costs (a practice that isn’t yet commonly used by suppliers).

SNV’s Integrated Decentralised Energy for Africa

Supporting local agriculture businesses to increase electricity demand and create a viable market is the motivation behind SNV’s IDEA concept. This approach will demonstrate different business models, involving different types of finance in communities across a number of countries including - Zimbabwe, Zambia, Burkina Faso, Benin, Rwanda and Ethiopia. SNV will work with local governments to ensure that the necessary frameworks are in place, and use our country offices to implement sustainable, local business approaches.

If you would like to learn more about IDEA please contact Dean Cooper, SNV Market Development Manager at dcooper@snv.org.